IMAGINE having no money to pay your rent arrears, and fearing losing your home, or having the cooker break down, no money to buy a new one, and no way to cook for your family.

Imagine losing your car and being unable to get to work, or desperately needing funds to start a new business. if you have no family able to help, and no credit rating so banks and building societies turn you away, it is no surprise you might turn to High Cost Short Term Credit (HCSTC) such as a pay day loan – or even worse, to loan sharks, illegal lenders who charge an exorbitant rate of interest and might resort to intimidation and even violence to get money back from you.

But another option is available: credit unions in Swindon offer community banking, safe savings and affordable loans. For residents north of the railway line is the Clivey Credit Union, based at the Pinetrees community Centre, while south of the railway line is the Wiltshire and Swindon Credit Union, created by a merger between Steam Ahead credit union and Wiltshire Savings and Loans.

Fiona Cox, a volunteer and business development officer for the new-look credit union, said they were keen to hear from volunteers to help run the credit union, as well as new members and people needing to take out loans.

“The credit union is run by volunteers, and those that set it up have all been volunteering a long time, so we need some new people,” she says.

We are meeting in the office of the Wiltshire and Swindon Credit Union in Cavendish Square, off Whitbourne Avenue. It is an accessible location with parking nearby, easy to pop into.

“We have two and a half thousand active members,” Fiona says. “The credit union will be based here. The challenge for us is that we would like it to be more accessible, with more person to person contact, for which we need more members and volunteers. We want to spread the word.”

She explains that many people who run short of money end up taking out doorstep loams and payday loans, and often do no realise how much money they could end up having to pay back because of high interest rates.

The Office for National Statistics recently released a report saying that UK households have seen their outgoings surpass their income for the first time in nearly 30 years – and on average, each UK household spent or invested around £900 more than it received in income last year. The last time households’ outgoings outstripped their income for a whole year was in 1988.

This means households are having to borrow or dip into their savings. ONS data shows people are borrowing more and saving less. Households took out nearly £80 billion in loans last year, the most in a decade. Unsurprisingly, lower earners are more likely to be spend beyond their means and struggle to make ends meet.

A credit union is a not-for-profit financial co-operative, and members can open savings accounts, while savings are used as a loan pool for help people borrow to pay for emergency repairs, to make a special purchase or pay off high interest loans. And savings are safe because they are backed by the Government.

You can become a member of the credit union for just £2 if you live in the area, and then you are encouraged to start saving regularly.

“People can save whatever they can afford – it gets you into a good habit. The savings accounts do not pay interest but do pay a dividend from profits from lending. We need to cover running costs, and any spare money goes back to the members. The amount people save varies so much. For some it will be a few pounds, for others much more.

“We can also lend to people who do not have a perfect credit history – people who can’t get loans from more conventional High Street lenders,” Fiona said. “They may well qualify for a loan from us.”

Loans can be made up to £10,000, depending on the borrower’s circumstances. Credit unions can charge up to 42.6 per cent APR (annual percentage rate) which equates to three per cent a month and is substantially lower than the rates charged by commercial short-term loan providers, which can be over 1000 per cent APR. The credit union loans range from three months to five years in length.

“People who in short-term lets often need money for a deposit when they move, or for moving expenses,” Fiona explains. “Sometimes people borrow money if they want a holiday and have no other way of paying it. People with large debts with high interest rates can use the credit union to consolidate.”

The credit union can create a real sense of community too.

“Not only are you saving for your own security and future, you are also helping other people who can’t access funds in other ways.

“It’s not just about getting people into more debt, but about looking at the case of each individual.”

Although occasionally borrowers did default on loans, she says the number is low, especially among people who have been members.

“We lend money more easily to people who have a history with us and intend to save regularly. We see a lot of financial difficulty out there. There is a demand for our services, but not enough people know about us and what we do.”

The Wiltshire and Swindon Credit Union has a number of collection points around area, often in church halls and community centres, which are run by volunteers. Fiona, who used to run a dental business, became a volunteer herself a few months ago.

“I sold my business last year and wanted to contribute in some way. I was approached to work with the credit union and realised it was something I could really get behind. It’s such a simple model and it really, really can make a difference.”

Volunteers need only spend a couple of hours a week at a collection point, or can join the board, or help with raising awareness.

The Wiltshire and Swindon Credit Union is holding an open event at the offices in Cavendish Square on Thursday September 13 from 10am. Drop by for coffee, cake and information about membership and volunteering.